By Tiernan Ray

Shares of Sprint-Nextel (S) are unchanged at $7.19 following a report this morning by Bloomberg’s Mariko Yaho and Emi Urabe that an unnamed executive with Japan’s Softbank (9984JP) has said the firm does not intend to raise its $20 billion offer for 55% of the company despite a higher $25.5 billion bid Monday from Dish Network (DISH).

The authors note that after raising $3.1 billion in bonds in October to facilitate the deal, the company’s debt rating is at risk of being downgraded to junk status.

This morning’s report follows yesterday’s note by Reuters’s Alina Selyukh and Sinead Carew that Dish has asked the Federal Communications Commission to block Softbank on grounds of national security.

At the same time, there has been something of an exchange of words this morning between Sprint CEO Dan Hesse and AT&T (T).

Hesse yesterday urged the FCC to be mindful of the huge spectrum position of AT&T and Verizon Communications (VZ) as it prepares for an auction of 600 MHz worth of spectrum being refarmed from broadcasters, according to a write-up by Broadcasting and Cable’s John Eggerton.

AT&T in response shot back that Sprint is being two-faced, with EVP Jim Cicconi telling Eggerton that “It never ceases to amaze me how some executives can go to Wall Street and brag about their unique and massive spectrum position, then come to Washington and claim the exact opposite and then demand the government allocate spectrum to them rather than auction it in an open bidding process as Congress directed.”

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There are 2 comments

APRIL 19, 2013 11:12 A.M.

none wrote:

the att executive is retarded. sprint's hesse was clearly refering to lower frequency spectrum (best spectrum for mobile data) is currently DOMINATED by ATT and VERIZON while the little guys dont even get a shot to get it

APRIL 19, 2013 6:44 P.M.

zanajohn1 wrote:

Softbank bid stalling amidst a host of regulatory and spectrum issues? Here is some speculation on what may be a path out of this for Softbank and DISH..

Softbank and DISH both want this deal but for complimentary reasons: Softbank for a worldwide 2.5 network, DISH for innovation with TV/internet. Both must have 2.5Mhz for this (read, CLWR).

But Softbank is encountering difficulty with DOJ/FBI approval and, S can't close on CLWR because of blatant mismanagement (along with Stanton) of CLWR resulting in a shareholder lawsuit which, even if not successful, will take time – something that none of the parties want.

To solve both these problems (before somebody else does), DISH and Softbank might consider a J/V where DISH has de jure control of the spectrum with Softbank de facto. Whatever it is, these constructions have been used in the past to get over the “who controls the spectrum” issue.

To get rid of the CLWR Cl A shareholder lawsuit the J/V will offer a premium cash price for CLWR Cl A shares (or a suitable exchange ratio for shares in J/V) AND a transfer of operating control of CLWR from S to the J/V. S will agree to this because neither the J/V nor anyone else will give S money w/o that suit being settled.

About Tech Trader Daily

Tech Trader Daily is a blog on technology investing written by Barron’s veteran Tiernan Ray. The blog provides news, analysis and original reporting on events important to investors in software, hardware, the Internet, telecommunications and related fields. Comments and tips can be sent to: techtraderdaily@barrons.com.